The European Fund for Strategic Investments (EFSI)
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About the EFSI
The European Fund for Strategic Investments – the EFSI – is the central pillar of the Investment Plan for Europe. It aims to tackle the lack of confidence and investment which resulted from the economic and financial crisis, and to make use of liquidity held by financial institutions, corporations and individuals at a time when public resources are scarce.
The Commission works together with its strategic partner, the European Investment Bank (EIB) Group. The EFSI supports strategic investments in key areas such as infrastructure, energy efficiency and renewable energy, research and innovation, environment, agriculture, digital technology, education, health and social projects. It also helps small businesses to start up, to grow and to expand by providing risk finance.
How does it work?
The EFSI is an EU-budget guarantee providing the EIB Group with a first loss protection. This means that the EIB Group is able to provide financing to higher-risk projects than they normally would. An independent Investment Committee uses strict criteria to decide whether a project is eligible for EFSI support. There are no quotas – by sector or by country. Financing is purely demand-driven.
Given the success of the EFSI, President Juncker announced a proposal in his 2016 State of the Union address to extend its duration and capacity to boost investment further. The so-called "EFSI 2.0" extends the lifetime of the fund from mid-2018 to end 2020 and increases its investment target from €315 billion to at least half a trillion euros. In December 2017, the European Parliament and Member States agreed on the "EFSI 2.0" Regulation and it became law on 30 December 2017.
Under the new EFSI, the Investment Committee will publish their decisions online, showing the reasons why they chose a project to receive support from the EU budget guarantee. The scoreboard of indicators will be published after the signature of each EFSI project. The new Regulation also gives a more detailed definition of what makes a project eligible for EFSI support, so-called "additionality".
Larger proportion of sustainable projects
At least 40% of EFSI infrastructure and innovation projects will aim to contribute to climate action in line with the Paris Agreement. EFSI 2.0 also explicitly targets new sectors: sustainable agriculture, forestry, fisheries and aquaculture.
Greater focus on small projects
Given the success of the EFSI in supporting small companies, the extended EFSI will increase the proportion of the guarantee for SMEs from 26% to 40%. The new EFSI also encourages the EIB Group to help national promotional banks set up investment platforms to bundle several small-sized projects by theme or by region in order to attract investors.
More technical support at the local level
The European Investment Advisory Hub, which is jointly managed by the Commission and the EIB, is proving a useful resource for businesses in need of technical support to get their project off the ground. In EFSI 2.0, the work of the Hub will be enhanced by providing more tailor-made assistance on the ground and working in close cooperation with national promotional banks.
How to apply for financing
This EIB page explains how you can apply for EFSI financing, whether you are a private or public sector entity, financial institution, fund, platform or an SME.